Irish to seek aid for steel aid

The Irish Cabinet is to seek permission from Brussels to invest £50m in its state-owned steel business in a move which will start a row with UK producers and could embarrass the British Government.

Irish MPs yesterday agreed to a rescue plan for the loss-making Irish Steel, in Cork, which is the equivalent to £166,000 per employee.

British Steel and other independent producers are expected to challenge the proposal for aid, as the European steel industry is facing severe overcapacity.

But the affair could also cause a dilemma for the UK Government, which has opposed subsidies for ailing state industries. With Anglo-Irish peace talks delicately poised, some people in the steel industry fear the UK may be unwilling to challenge Dublin on the matter.